These great commercial companies, char tered by their respective governments, were not only traders but explorers and colonizers as well, especially those operating in America, while those operating in the Orient established trading stations and by obtaining concessions from the native governments gained control of important areas. The colonies and trading stations thus established contributed greatly to the advantage of the mother country, both by their contributions of needed supplies and by the market they furnished for manufactures. As a result of the desire to develop the produc tion of the tropical areas, especially in America, the African slave trade was built up, multiply ing the production of the colonies, in the New World, and only terminating with the American Civil War. The application of the compass to navigation had a profound effect upon world commerce. Prior to that time most of the international trade was the exchange of the products of the near East and the sub tropical Mediterranean area for those of north ern and western Europe, a limited exchange of the products of the different climatic prod ucts and civilizations. But with the exten sion of the transportation and trade to every part of the world, and the development of the producing power of the new countries the exchanges between different civilizations, cli matic areas and manufacturing communities was greatly enlarged, and commerce became more than ever a division of labor among great groups of people and great sections of the world.
The transition from the sail on the ocean and animal power on land to steam vessels on the ocean and the railway on land was not accomplished in a single year or decade. The first steam vessel crossed the ocean in 1819, and another from England to India in 1825, but it was not until 1838 that successful trans-Atlantic steam service was established.
All of these vessels were propelled by the paddle wheel, which proved unsatisfactory for ocean service, and in about 1845 the screw pro peller was introdueed and soon displaced the paddle wheel. Iron began to be substituted for wood for the construction of vessels about 1850, and steel for iron about 1865. The en gines used by the vessels were at first very simple and unsatisfactory, and it was not until 1864 that the compound engine was adapted to marine use, and the triple-expansion engine in 1874, and other equally important changes later. By these improvements the speed and carrying power of vessels was quadrupled. A single steamship of to-day will carry 600 modern car loads of ordinary merchandise. The result of this development of the steamship is that the tonnage of the sailing vessels of the world is now but about one-fourth that of 1860, while that of the steamships is 16 times as great as in that year, and when we remember that the average steamship will, by reason of its greater speed and more complete control in all kinds of weather, make four times as many trips over a given course in a year as the sailing vessel we begin to realize the enormous expan sion of the carrying power which came with the ocean steamer. The growth of the railway on
land was an equally important factor in the development of the third period, and so was that of the telegraph. The railways of the world were but,24,000 miles in 1850, now they are 725,000 miles, or 30 times as much, and their carrying capacity per mile is probably four times as much as then, due to the im provement of roadbeds, the change from iron to heavy steel rails, double and quadniple tracks, stronger, larger and faster engines and larger and better cars. They have made pos sible the transportation of merchandise from the interior of the continents to the water's edge, and this fact has stimulated the develop ment of population in the interior. The popu lation of the interior of the United States, for instance, has trebled since 1870, and the value of its products increased from $2,000,000,000- to $20,000,000,000. World population, which was but 650,000,000 in 1818, grew to 1,690,000,000 in 1918, due in part to the opening of new areas to population, and in part to the practicability of .increasing the density of population at any point and transporting from other parts of the world the food which is required.
Instantaneous communication has also con tributed greatly to the growth of commerce in the latest penod. The land and ocean tele graphs in 1850 aggregated but 5,000 miles and to-day are more than 2,000,000 miles, with greatly increased facility of transmission per mile, and even this wonderful system has been greatly intensified by the telephone and wire less telegraph. The fact that the business man or producer in any part of the world can now speak instantly to the business man in any other part of the world, on the other side of the globe, in the interior of the continent and even to the vessels in the midst of the oceans, and may also transmit funds by the same instantaneous process, if desired, adds enorm ously to the convenience and activity of com merce.
Finance has also participated largely in this growth of corrunerce in recent years. The world's production of gold prior to 1850 was less than $10,000,000 a year; now it is $460,00C1, 000 per year, or 50 times as much.. The quan tity of gold mined in the short period since 1870 is twice as much as in the 400 years prior to 1870. This enormous increase in the quantity of the world's accepted medium of exchange has greatly aided the growth of commerce, while the development of the banlcing and credit systems has been quite as important. The banlring power of the world, by which we of course mean capital, surplus, deposits and circulation, has grown from approximately $8,000,000,000 in 1870 to $80,000,000,000 at the present time, and credits have expanded with an equal rapid ity.